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View SlideshowRequest to buy this photoAmong the suburban districts owed money by the Columbus City Schools are, clockwise from top left, Hamilton Local, New Albany, Westerville and Canal Winchester.

The Columbus school district owes a total of almost $6 million to six suburban districts for
billing errors it made on the Win-Win agreement, a problem that a consultant figured out in 2010
but that the districts have never publicly discussed.

Last fall, Columbus apparently pleaded for leniency in secret negotiations, while the suburban
districts demanded full payment, documents show. The suburban districts threatened to sue in
January and halted new payments to the Columbus district, suggesting instead that the money be put
in a “settlement account.”

The 1986 Win-Win pact allows areas of the city of Columbus to remain in nine suburban Franklin
County school districts rather than be transferred into the Columbus district.

Typically, when a city expands in Ohio, its city school district expands along with it, but that
didn’t always happen in Columbus from the 1950s through the 1970s. The Columbus district began
threatening in the 1980s to retake those areas, until the Win-Win pact ended the fight through a
revenue-sharing arrangement.

The tiny Hamilton school district is owed the most by Columbus: nearly $1.63 million, or 7
percent of its revenue for this school year. New Albany schools are owed $1.42 million; Canal
Winchester, $962,000; and Westerville, $934,000. Also owed are Gahanna-Jefferson, $684,000, and
Groveport Madison, $336,000.

Each of three districts — Dublin, Hilliard and South-Western — owes Columbus schools $96,170. A
verbal agreement apparently was reached among district treasurers to repay Columbus over six years,
although none of the districts’ boards was involved in that decision, officials said.

“As a result of (the Columbus district’s) errors and omissions, the suburban districts have lost
the use of badly needed tax dollars,” Nicholas Pittner, the attorney for the suburban districts,
wrote in January to Columbus’ attorney, Greg Stype. The suburban districts “will not simply lop off
a number of dollars to agree to (Columbus’) ‘half-off something’ proposal,” but rather they
expected “to recover the full amount owed,” Pittner wrote.

The letter also informed Columbus that the suburban districts planned to divert all of their
annual payments into an escrow fund to be used to repay themselves. The fund would be managed by
the Educational Service Center of Central Ohio, which released documents about the negotiations
after
The Dispatch filed an Ohio Public Records Act request on March 26.

The suburban districts stopped making payments this year, and the problem became public
knowledge late last month when the Columbus schools treasurer reported zero dollars of Win-Win
money in a financial forecast.

Columbus schools received the same records request on the same day as the Educational Service
Center but had released only one email, from the district treasurer, as of yesterday. District
general counsel Larry Braverman said the district kept the billing error secret to avoid being
accused by the suburban districts of negotiating in bad faith.

The school board is aware of the magnitude of the billing mistake, Columbus Superintendent Gene
Harris said. “I don’t think there was any intention to keep anything secret; it was just a matter
of negotiations of how we go forward,” Harris said. “So there was no need to have a public
conversation about that.”

District spokesman Jeff Warner said the district remains committed to the Win-Win agreement and
that a settlement is near. The district is working to address miscalculations as well as spread out
any payments that the city schools might owe to the suburban districts. Braverman wouldn’t comment
on whether the district had proposed that the suburbs forgive the debt, as documents suggest.

“Of course, in discussions like this,” said Pittner, the suburban districts’ attorney, “folks
tend to do what they believe is in their own best interest. Those kinds of (demands) have been
going on, I believe, on both sides of the table.”

Although no district has disputed the amounts owed, no one has repaid anything, Pittner
said.

The mistake was made by an employee in the Columbus district treasurer’s office who has since
retired, officials said.

The problem was uncovered when the suburban districts hired a consultant, former Ohio State
University professor Howard Fleeter, to review the agreement. Fleeter, a government-finance expert,
found errors that the Columbus district made in billing, such as using the wrong inflation index
and wrong base amounts to calculate growth in property values, said Bart Anderson, superintendent
of the Educational Service Center.

“The only thing remaining now is how many years to make the correction payments,” said Anderson,
whose organization paid Fleeter and is being reimbursed by the suburban districts.

The billing “involves a very complex formula that was applied to hundreds of parcels of real
estate,” Columbus schools’ Warner said.

The district is developing a process for “full and transparent calculations” and will ask for
confirmations of the amounts billed, Warner said.